WTO trade indicator suggests world trade will remain below trend

The deceleration is caused by slowing economic growth, increased tariffs, brexit-related uncertainty.

According to the World Trade Organization (WTO) Goods Trade Barometer world merchandise trade is expected to remain below trend into the fourth quarter of 2019.

The latest reading of 96.6 marks a slight improvement compared to the 95.7 registered in August, but it remains well below the index’s baseline value of 100, signalling below average growth.

Official data confirm the loss of momentum in goods trade foreseen by the Goods Trade Barometer earlier this year. According to the latest WTO quarterly trade volume statistics, merchandise trade rose by only 0.2% year-on-year in the second quarter of 2019, compared with 3.5% in the same quarter of last year.

In September, WTO economists downgraded their trade growth expectations for 2019 to 1.2%, down from the 2.6% forecast in April. They attributed this substantial deceleration to slowing economic growth, increased tariffs, brexit-related uncertainty, and the shifting monetary policy stance in developed economies.

The full Goods Trade Barometer is available here (pdf).